Image Mode
In photoshop, an "image mode" (or "color space") is a protocol for translating numeric data into a description of a color.
Part of Photoshop CS5
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Screenshot Color calibration test chart.jpg

Along with image dimension and bit depth, image mode makes up one of the three essential attributes of raster-based images. Computers know nothing about tone or color; they just crunch numbers. Image mode is the attribute that provides a human meaning for the numbers they crunch.

In general, the numbers that describe pixels relate to tonal values, with lower numbers representing darker tones and higher ones representing brighter tones. In an 8-bit/channel grayscale image, 0 represents solid black, 255 represents pure white, and the intermediate numbers represent intermediate shades of gray.

In the color image modes, the numbers represent shades of a primary color rather than shades of gray. So an RGB image is actually made up of three grayscale channels: one representing red values, one green, and one blue. A CMYK image contains four grayscale channels: one each for cyan, magenta, yellow and black.

Image Modes in Photoshop

Description below borrowed from How Color Works in Photoshop by Fraser and Blatner.

Bitmap

in Photoshop,"flat" black-and-white images, in which each pixel is defined using one bit of data (a zero or a one), are called "bitmaps".

One-bit pictures have a particular difference from other images when it comes to PostScript printing: the white areas throughout the image can appear transparent, showing through to whatever the image is printing over. Ordinarily, images are opaque, except for the occasional white silhouetted background made with clipping paths (see "Silhouettes" in Chapter 12, Essential Image Techniques).

The other major difference between the other image modes and Bitmap mode is that you're much more limited in the sorts of image editing you can do. For instance, you can't use any filters, and because there's no such thing as anti-aliasing in 1-bit images, you just cannot use tools that require this, such as the Smudge tool, the Blur tool, or the Dodge/Burn tool.

Bilevel bitmaps are the most generic of images, so you can save them in almost any file format.

Greyscale

Grayscale files in Photoshop are always either 8- or 16-bit images: Anything less than 8-bit gets converted to 8-bit; anything more than 8-bit gets converted to 16-bit. Eight-bit is still more common, although most scanners now allow you to bring more than 8 bits into Photoshop.

With 8-bit grayscale, each pixel has a value from 0 (black) to 255 (white), so there are a maximum of 256 levels of gray possible. With 16-bit grayscale, each pixel has a value from 0 (black) to 32,768 (white), for a theoretical maximum of 32,769 possible gray shades.

Few capture devices can actually deliver all those gray shades, so 16-bit files usually have rather a lot of redundancy. But that redundancy translates into editing headroom, so if your camera or scanner can capture 12 or more bits per pixel, it's often worthwhile bringing the high-bit data into Photoshop.

Eight-bit grayscale images are pretty generic, so you can save them in almost any format this side of MacPaint. You can save 16-bit grayscale images in a number of formats, but if you add layers, your choices are limited to Photoshop, Large Document Format, PNG, PDF, and Photoshop Raw, and TIFF.

Duotone

Not often used in architectural applications

When you print a grayscale image on a printing press, those 256 levels of gray often get reduced to 100 or so because of the limitations of the press. You can counter this flattening effect considerably—increasing the tonal range of the printed image—by printing the image with more than one color of ink. This is called printing a duotone (for two inks), a tritone (for three inks), or a quadtone (for four).

Indexed Color

Each pixel in a grayscale image is defined with eight bits of information, so the file can contain up to 256 different pixel values. But each of those values, from 1 to 256, doesn't have to be a level of gray. The Indexed Color image mode is a method for producing 8-bit, 256-color files. Indexed-color bitmaps use a table of 256 colors, chosen from the full 24-bit palette. A given pixel's color is defined by reference to the table: "This pixel is color number 123, this pixel is color number 81," and so on.

While indexed color can save disk space (it requires only 8 bits per sample point, rather than the full 24 in RGB mode—see below), it gives you only 256 different colors. That's not a lot of colors, when you compare it to the 16.7 million different colors you can get in RGB.

Another major limitation is that most editing tools won't work in Indexed Color, because they almost all rely on the numeric values having a relationship to how light or dark the pixel is. Therefore, you should always do your image editing in RGB mode and then convert to Indexed Color mode as a last step—the relatively tiny size of Indexed Color images makes them useful for Web graphics, but not for many other uses.

You can save indexed-color images in Photoshop, GIF, PNG, PICT, Amiga IFF, or BMP format.

RGB

Every color computer monitor and television in the world displays color using the RGB image mode, in which every color is produced with varying amounts of red, green, and blue light. (These colors are called additive primaries because the more red, green, or blue light you add, the closer to white you get.) In Photoshop, files saved in the RGB mode typically use a set of three 8-bit grayscale files, so we say that RGB files are 24-bit files.

These files can include up to approximately 16 million colors—more than enough to qualify as photographic quality. This is the mode in which we prefer to work when editing color images. Also, most scanners save images in RGB format. High-end drum scanners include "color computers" that automatically convert files to CMYK mode (see below), but RGB scanning is becoming more common even in shops with these scanners.

You can save 24-bit RGB files in Photoshop, EPS, TIFF, PICT, Amiga IFF, BMP, JPEG, PCX, PDF, Pixar, Raw, Scitex CT, or Targa format, but unless you have compelling reasons to do otherwise, we suggest you stick with Photoshop (PSD), TIFF, PDF, or EPS.

Photoshop also lets you work with 48-bit RGB files, which contain three 16-bit channels instead of three 8-bit ones. Layered 48-bit images offer great editing flexibility, so we're using them more often now.

CMYK

Traditional full-color printing presses can print only four colors in a run: cyan, magenta, yellow, and black. Every other color in the spectrum is simulated using various combinations of those colors. When you open a file saved in CMYK mode, Photoshop has to convert the CMYK values to RGB values on the fly, in order to display the image on your computer screen. It's important to remember that when you look at the screen, you're looking at an RGB version of the data.

If you buy high-end drum scans, they'll probably be CMYK files. Otherwise, to print your images on press or on some desktop color printers, you'll have to convert your RGB images to CMYK. We discuss Photoshop's tools for doing so in Chapter 5, Color Settings.

You can save CMYK files in Photoshop, TIFF, PDF, EPS, JPEG, DCS, Scitex CT, and Raw formats, but the first four are by far the most common.

Lab

Not often used in architectural applications

Lab doesn't describe a color by the components that make it up (RGB or CMYK, for instance). Instead, it describes what a color looks like. Device-independent color spaces are at the heart of the various color management systems now available that improve color correspondence between your screen, color printouts, and final printed output.

Multichannel

Not often used in architectural applications

The last image mode that Photoshop offers is Multichannel mode. This mode is the generic mode: like RGB or CMYK, Multichannel mode has more than one 8-bit channel; however, you can set the color and name of each channel to anything you like.